The reason why you are getting more vacuum is because the RPMs go up when timing is increased.
I would imaging the engine would run best with about 18 degrees intial (not sure on cam specs, so I'm guessing on that), with 36* at around 2800.
As far as the low idle vacuum goes, is there a leak somewhere? What is your idle RPM?
Lead Mechanical Engineer
Art Morrison Ent. Inc.